Pre-Market Report on 12.08.2008

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B. Karthick

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Aug 12, 2008, 12:11:57 AM8/12/08
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Sensex to trade in a narrow band with a positive bias
Aug 12, 2008

Stocks are expected to maintain their momentum as continues its
southward journey reducing the concerns of higher inflation and
boosting the slowing economy. Expect the Sensex to trade in a narrow
band with positive bias for the day.

Overnight stocks in US had a decent day as the Dow closed in green by
gaining 0.4 percent for the day. The Standard & Poor's 500 index rose
9.00, or 0.69 percent, to 1,305.32. The Nasdaq composite index rose
25.85, or 1.07 percent, to 2,439.95. Light, sweet crude still fell 75
cents to settle at $114.45 per barrel on the New York Mercantile
Exchange after dipping to $112.72, its lowest price since early May.
Oil managed to move off its lowest levels Monday and this deflated a
stock market rally that was building upon steep gains from last week.
Stocks in Asia and Europe are expected to open higher in the morning
session.

The current rally is clearly driven by fall in commodity prices and
Oil in particular, which was responsible for the fall in the markets
for the past couple of months. Commodities prices are in the
``greatest decline ever", as the Reuters Jefferies/CRB Index of 19 raw
material and agricultural commodities has tumbled 19 percent since
July. The car industry recorded a dip in sales for the first time in
more than two and a half years as sales in the domestic market slipped
1.71 per cent in July as interest rates and rise in Oil have crippled
the sales. This news is not going to impact the stocks in Auto sector
as the fall in Oil prices is expected to improve the sales in the
coming quarters providing support to the stocks at current level.

Wednesday will be a crucial day for the markets as the market
regulator Sebi’s board will take up the review of curbs imposed on
Participatory Notes on August 13, but is unlikely to relax them. Any
surprise on this front will fuel a rally in the markets. On the
banking front State Bank lifted the prime lending rate by 100 basis
points to 13.75 percent from 12.75 percent starting tomorrow.The stock
of Parsvnath Developers might see some demand as the company plans to
foray aggressively in to the retail sector.

Some of the stocks that are worth keeping an eye in today's trade
include, Deccan Aviation, Jet Airways. multiplex players like Inox
Leisure, PVR and Pyramid Saimira. Nissan Copper and Vakrangee Software
might see some action ahead of their board meetings for preferential
allotment to their promoters.

Suitable stocks for intraday trading:
==========================
<HDFCBANK, RCOM, HDFC, AXISBANK, DLF, STER, GAIL, JSWSTEEL,
CENTURYTEX, M&M>

Market Close Box:
=============
BSE Sensex 15503.92 336.10
NSE Nifty 4620.40 90.90
USD Rs.42.00
Oil Nymex $114.4

B.Karthick,
Research Analyst.
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